Belgian FBO chain sets sights on France

 - September 14, 2006, 11:10 AM

Antwerp, Belgium-based Flying Group has become a major business aviation player in France, with new sites at Cannes and at Paris Le Bourget. The recent opening of Flying Group’s state-of-the-art terminal at the French capital’s dedicated business aviation airport is symbolic of the fast-growing company’s ambitions in France.

Flying Group owner and president Bernard van Milders not only has “a totally new way of looking at business aviation” but also expresses strong views about the deep divisions among European business aviation operators in the bitter row about how fractional ownership is regulated in Europe.

In addition to its new terminal at Le Bourget’s entrance–an existing building rebuilt at a cost of almost $5 million–Flying Group also has demolition and rebuilding work planned on a 344,000-sq-ft site expected to be ready early next year. The facility will become Flying Group’s headquarters, complete with offices and hangar facilities. The hangar at Cannes is due for completion this month. A Citation Excel and a Bravo will be based at Le Bourget and Cannes depending on clients’ needs. “For loyal clients, positioning these two aircraft out of either airport will be at the same price,” van Milders told AIN.

Van Milders founded the company as Flying Partners in 1991 with the plan of establishing a fractional ownership business and charter service in the Belgian market. The company began with a Cessna 425 Conquest I and a Citation S/II. The Group today consists of business jet fractional ownership company Flying Partners and airline company Flying Service, which together employ 80 people, 45 of them pilots. From five aircraft at the turn of the millennium, it now boasts a fleet of 14 owned and managed business jets, five of which joined the fleet last year.

A Falcon 900DX EASy was delivered in May and a second Citation X is due in September. Deliveries of three Citation Mustangs and two CJ3s are earmarked for 2008. Other orders are possible, but van Milders does not believe light jets have a lot of potential in fractional operations. Meanwhile, customers with aircraft already under Flying Group management have a Citation Sovereign, a Falcon 2000EX EASy and three Falcon 7Xs on order.

Flying Partners operates under both private and commercial rules, and its shared-ownership program guarantees flying days, not hours, 10 percent of which can be used flexibly by transferring hours to or from the previous year. Ownership shares are based on the number of days customers intend to use their aircraft, with their operational costs depending on the number of hours they fly. The company will sell any fraction from a minimum one-tenth share, which buys 30 days.

In March it launched the test phase of its fractional aircraft program, Flying Cards. “Our main aim is to consolidate and build in France. We have capacity for 20 aircraft, which we will position at our various sites. We really want to concentrate on this and attract airplanes for management, particularly the larger, transatlantic business jets to boost Flying Cards at Le Bourget,” van Milders said.

The company is close to releasing details of three packages of a minimum 25 hours in the Excel and Bravo. This means major investments in buildings and real estate, which are partly self-financed. He added that–with regard to France–the company has no plans to invest, purchase facilities or base aircraft outside Le Bourget and Cannes for two years. However, he did add, “But if a customer wants an airplane based elsewhere we will consider it.”

Leveling the Playing Field in Europe

According to van Milders, “Business aviation is growing. Paris is our biggest growth market and there is a lot of scope for expansion. For example, business jets will not only go to the main cities but also to regional airports. But the most important message we want to give [is that the company offers] good service at a reasonable price.”

Flying Group’s expansion is not taking the FBO company in the same direction as Jet Aviation or TAG Aviation. Van Milders believes Jet Aviation offers completely different services. “They do maintenance and aircraft completion, but we have no plans [to take on] this activity. We are not in competition with them for customers.”

He added, “The most important reason for our expansion in France is the country’s expansion of business aviation. The biggest part of the funding for our expansion is in buildings, which we have obtained through lease financing. We might consider a partnership for new FBO handling activity, but there is no commitment for this yet. If we decide on this option it will add value to our operation, but there is no question of us losing control of the operation, so any partnership would be
in the FBO and/or ground services, not in [aircraft] management.”

In the row over proposed changes to the way fractional ownership is regulated in Europe, Van Milders said he supports NetJets’ demands for a new category of operations similar to Part 91K fractional ownership rules in the U.S. to allow fractional operations under private, rather than commercial rules, as is currently required.

“Security must be guaranteed but we definitely agree it should not be under JAR-OPS 1 commercial operation.” He expects that it will take some time for a European version to come to fruition, as traditionally there is a few years’ delay between rulemaking in the U.S. and in Europe.

Of particular interest to operators is the U.S.’s refusal to allow European operators more than six transatlantic trips a year while there are no restrictions on U.S. operators in Europe. “This has created an imbalance between the U.S. and Europe as the U.S. protects its market, and European companies should have the same rights in the U.S. as the Americans do in Europe.”

Some European operators believe that the future of executive charter in Europe lies in large fleets and groupings of operators, such as Jet Aviation’s charter operators’ alliance. However, Van Milders disagrees. “The most important aspect of our business is the personal relationship between client and operator. Some operations will work together, but I am convinced that business will not be driven by alliances because they are too impersonal.”

Business aviation, he said, will grow in Europe through increasing orders for business jets, which are now “about the same in Europe as in the U.S., meaning a big increase for Europe’s business aviation sector. I am sure new companies will come onto the market and that fractional operations will develop. The market is not interested in fractional aircraft with old business jets.”